Question 1 Multiple Choice 1 of 1 point(s)
The main tenet of mercantilism was that it was in a country's best interest to maintain a trade:
Your Answer: surplus
Correct Answer: surplus
Feedback: Difficulty: Medium
Page: 147
Question 2 Multiple Choice 0 of 1 point(s)
The Heckscher-Ohlin theory has a(n) _______ appeal.
Your Answer: cost efficiency
Correct Answer: commonsense
Feedback: Difficulty: Medium
Page: 158
Question 3 Multiple Choice 1 of 1 point(s)
According to the new trade theory, if international trade results in a country specializing in the production of a certain good, and if there are economies of scale in producing that good, then as output of that good expands, unit costs will:
Your Answer: fall
Correct Answer: fall
Feedback: Difficulty: Medium
Page: 162
Question 4 Multiple Choice 0 of 1 point(s)
Porter's thesis was that four broad attributes of a nation shape the environment in which local firms compete, and that these attributes promote or impede the creation of competitive advantage. All of the following are attributes except:
Your Answer: firm strategy, structure, and rivalry
Correct Answer: customs
Feedback: Difficulty: Hard
Page: 165-166
Question 5 Multiple Choice 1 of 1 point(s)
_______ is the basic message of the theory of comparative advantage.
Your Answer: Potential world production is greater with unrestricted free trade than it is with restricted trade
Correct Answer: Potential world production is greater with unrestricted free trade than it is with restricted trade
Feedback: Difficulty: Hard
Page: 153
Question 6 Multiple Choice 1 of 1 point(s)
Swedish economists, __________ and __________, advanced a theory of trade that argued that comparative advantage arises from differences in national factor endowments.
Your Answer: Hecksher, Ohlin
Correct Answer: Hecksher, Ohlin
Feedback: Difficulty: Medium
Page: 158
Question 7 True/False 1 of 1 point(s)
Free trade is a situation where a government does not attempt to influence through quotas or duties what its citizens can buy from another country or what they can produce and sell to another country.
Your Answer: true
Correct Answer: true
Feedback: Difficulty: Easy
Page: 144
Question 8 Multiple Choice 0 of 1 point(s)
The flaw with mercantilism was that it viewed trade as a(n) __________.
Your Answer: threat to a government's independence
Correct Answer: zero-sum game
Feedback: Difficulty: Medium
Page: 148
Question 9 Multiple Choice 1 of 1 point(s)
Porter argues that the presence of all components is usually required for the “diamond” to boost:
Your Answer: competitive performance.
Correct Answer: competitive performance.
Feedback: Difficulty: Medium
Page: 168
Question 10 Multiple Choice 0 of 1 point(s)
Resources do not always move easily from one economic activity to another and the process creates:
Your Answer: inflation.
Correct Answer: friction and human suffering.
Feedback: Difficulty: Medium
Page: 154
Name: Quiz 2--Chapter 4
Status: Completed
Score: 7 out of 10 point(s)
Time Elapsed: 6 minutes and 11 seconds out of 10 minutes allowed.
Instructions:
Question 1 Multiple Choice 1 of 1 point(s)
The theory of __________ was advanced by Adam Smith.
Your Answer: absolute advantage
Correct Answer: absolute advantage
Feedback: Difficulty: Easy
Page: 144
Question 2 True/False 1 of 1 point(s)
According to our textbook, the product life-cycle theory has excellent relevance in the modern world.
Your Answer: false
Correct Answer: false
Feedback: Difficulty: Hard
Page: 161
Question 3 Multiple Choice 0 of 1 point(s)
Porter argued that in regard to factor endowments, __________ factors are the most significant for competitive advantage in his study dealing with the competitive advantage of nations.
Your Answer: basic
Correct Answer: advanced
Feedback: Difficulty: Medium
Page: 166
Question 4 Multiple Choice 0 of 1 point(s)
In the 20th century, __________ work was refined by two Swedish economists, Eli Heckscher and Bertil Ohlin, whose theory is known as the Heckscher-Ohlin theory.
Your Answer: Hofstede's
Correct Answer: Ricardo's
Feedback: Difficulty: Medium
Page: 144
Question 5 True/False 0 of 1 point(s)
The notion of first-mover advantages is associated with the product life cycle theory.
Your Answer: true
Correct Answer: false
Feedback: Difficulty: Medium
Page: 164
Question 6 Multiple Choice 1 of 1 point(s)
Porter argues that the presence of all components is usually required for the “diamond” to boost:
Your Answer: competitive performance.
Correct Answer: competitive performance.
Feedback: Difficulty: Medium
Page: 168
Question 7 Multiple Choice 1 of 1 point(s)
_______ is/are unit cost reductions associated with a large scale of output.
Your Answer: Economies of scale
Correct Answer: Economies of scale
Feedback: Difficulty: Easy
Page: 162
Question 8 Multiple Choice 1 of 1 point(s)
The main tenet of mercantilism was that it was in a country's best interest to maintain a trade:
Your Answer: surplus
Correct Answer: surplus
Feedback: Difficulty: Medium
Page: 147
Question 9 Multiple Choice 1 of 1 point(s)
Because of substantial economies of scale, the __________ theory argues that in many industries there are increasing returns to specialization.
Your Answer: new trade
Correct Answer: new trade
Feedback: Difficulty: Medium
Page: 162
Question 10 Multiple Choice 1 of 1 point(s)
According to the new trade theory, if international trade results in a country specializing in the production of a certain good, and if there are economies of scale in producing that good, then as output of that good expands, unit costs will:
Your Answer: fall
Correct Answer: fall
Feedback: Difficulty: Medium
Page: 162
Question 1 Multiple Choice 1 of 1 point(s)
The theory of comparative advantage
Your Answer: provides a strong rationale for encouraging free trade.
Correct Answer: provides a strong rationale for encouraging free trade.
Feedback: Difficulty: Medium
Page: 153
Question 2 Multiple Choice 1 of 1 point(s)
Vernon's product life-cycle theory was based on the observation that for most of the 20th century a very large proportion of the world's new products had been developed by U.S. firms and sold first in the _______ market.
Your Answer: U.S.
Correct Answer: U.S.
Feedback: Difficulty: Medium
Page: 159
Question 3 Multiple Choice 0 of 1 point(s)
The Hecksher-Olin theory argues that the pattern of international trade is determined by differences in:
Your Answer: national priorities
Correct Answer: factor endowments
Feedback: Difficulty: Medium
Page: 158
Question 4 Multiple Choice 1 of 1 point(s)
_______, by its choice of policies, can detract from or improve national advantage.
Your Answer: Government
Correct Answer: Government
Feedback: Difficulty: Easy
Page: 166
Question 5 Multiple Choice 0 of 1 point(s)
The Heckscher-Ohlin theory ________ in explaining why some countries export oil while others export textiles.
Your Answer: emphasizes international differences in cultural histories
Correct Answer: emphasizes the interplay between the proportions in which the factors of production (such as land, labor, and capital) are available in different countries
Feedback: Difficulty: Hard
Page: 145
Question 6 True/False 1 of 1 point(s)
According to Porter, the four broad attributes of a nation that shape the environment in which local firms compete and that promote or impede the creation of competitive advantage are demand conditions, firm strategy, structure, and rivalry, factor endowments, and relating and supporting industries.
Your Answer: true
Correct Answer: true
Feedback: Difficulty: Medium
Page: 165
Question 7 Multiple Choice 1 of 1 point(s)
__________ refers to a situation where a government does not attempt to influence through quotas or duties what its citizens can buy from another country or what they can produce and sell to another country.
Your Answer: Free trade
Correct Answer: Free trade
Feedback: Difficulty: Easy
Page: 144
Question 8 True/False 0 of 1 point(s)
In his 1776 landmark book, The Wealth of Nations, Adam Smith supported the mercantilist assumption that trade is a zero-sum game.
Your Answer: true
Correct Answer: false
Feedback: Difficulty: Medium
Page: 148
Question 9 Multiple Choice 1 of 1 point(s)
In the 20th century, __________ work was refined by two Swedish economists, Eli Heckscher and Bertil Ohlin, whose theory is known as the Heckscher-Ohlin theory.
Your Answer: Ricardo's
Correct Answer: Ricardo's
Feedback: Difficulty: Medium
Page: 144
Question 10 Multiple Choice 1 of 1 point(s)
Because of substantial economies of scale, the __________ theory argues that in many industries there are increasing returns to specialization.
Your Answer: new trade
Correct Answer: new trade
Feedback: Difficulty: Medium
Page: 162
Question 1 True/False 1 of 1 point(s)
According to Porter, the four broad attributes of a nation that shape the environment in which local firms compete and that promote or impede the creation of competitive advantage are demand conditions, firm strategy, structure, and rivalry, factor endowments, and relating and supporting industries.
Your Answer: true
Correct Answer: true
Feedback: Difficulty: Medium
Page: 165
Question 2 Multiple Choice 0 of 1 point(s)
Which theory of international trade directly explains why there are only two to three producers of airlines in the world today?
Your Answer: Absolute advantage
Correct Answer: New trade
Feedback: Difficulty: Medium
Page: 163
Question 3 True/False 0 of 1 point(s)
Smith's basic argument was that a country should never produce goods at home that it can buy at a lower cost from other countries.
Your Answer: false
Correct Answer: true
Feedback: Difficulty: Medium
Page: 148
Question 4 True/False 1 of 1 point(s)
A firm should invest in upgrading advanced factors of production because it is in the best interest of business for a firm, according to Porter's theory.
Your Answer: true
Correct Answer: true
Feedback: Difficulty: Medium
Page: 171
Question 5 True/False 1 of 1 point(s)
The great strength of the theories of Smith, Ricardo, and Heckscher-Ohlin is that they identify the specific benefits of international trade.
Your Answer: true
Correct Answer: true
Feedback: Difficulty: Medium
Page: 144
Question 6 Multiple Choice 1 of 1 point(s)
Which theory predicts that countries will export those goods that make intensive use of those factors that are locally abundant, while importing goods that make intensive use of factors that are locally scarce?
Your Answer: Hecksher-Olin
Correct Answer: Hecksher-Olin
Feedback: Difficulty: Medium
Page: 158
Question 7 Multiple Choice 0 of 1 point(s)
According to David Hume, if England had a balance-of-trade surplus with France, the resulting inflow of gold and silver would:
Your Answer: France's prices would rise
Correct Answer: increase the money supply and cause inflation in England
Feedback: Difficulty: Medium
Page: 148
Question 8 Multiple Choice 1 of 1 point(s)
Dynamic gains in both the stock of a country's resources and the efficiency with which resources are utilized will cause a country's PPF to:
Your Answer: shift outward
Correct Answer: shift outward
Feedback: Difficulty: Hard
Page: 156
Question 9 Multiple Choice 1 of 1 point(s)
_______ is the basic message of the theory of comparative advantage.
Your Answer: Potential world production is greater with unrestricted free trade than it is with restricted trade
Correct Answer: Potential world production is greater with unrestricted free trade than it is with restricted trade
Feedback: Difficulty: Hard
Page: 153
Question 10 Multiple Choice 1 of 1 point(s)
_______ is not consistent with the central beliefs of mercantilism.
Your Answer: Policies should be put in place to minimize exports and maximize imports
Correct Answer: Policies should be put in place to minimize exports and maximize imports
Feedback: Difficulty: Hard
Page: 148
Question 1 True/False 0 of 1 point(s)
The notion of first-mover advantages is associated with the product life cycle theory.
Your Answer: true
Correct Answer: false
Feedback: Difficulty: Medium
Page: 164
Question 2 Multiple Choice 1 of 1 point(s)
The Heckscher-Ohlin theory ________ in explaining why some countries export oil while others export textiles.
Your Answer: emphasizes the interplay between the proportions in which the factors of production (such as land, labor, and capital) are available in different countries
Correct Answer: emphasizes the interplay between the proportions in which the factors of production (such as land, labor, and capital) are available in different countries
Feedback: Difficulty: Hard
Page: 145
Question 3 Multiple Choice 1 of 1 point(s)
The economic and strategic advantages that accrue to early entrants in an industry are called:
Your Answer: first-mover advantages
Correct Answer: first-mover advantages
Feedback: Difficulty: Easy
Page: 164
Question 4 Multiple Choice 0 of 1 point(s)
Propagated in the 16th and 17th centuries, __________ advocated that countries should simultaneously encourage exports and discourage imports.
Your Answer: capitalism
Correct Answer: mercantilism
Feedback: Difficulty: Easy
Page: 144
Question 5 Multiple Choice 1 of 1 point(s)
The Hecksher-Olin theory argues that the pattern of international trade is determined by differences in:
Your Answer: factor endowments
Correct Answer: factor endowments
Feedback: Difficulty: Medium
Page: 158
Question 6 Multiple Choice 0 of 1 point(s)
The Heckscher-Ohlin theory has a(n) _______ appeal.
Your Answer: political
Correct Answer: commonsense
Feedback: Difficulty: Medium
Page: 158
Question 7 Multiple Choice 0 of 1 point(s)
In terms of explaining why some countries export automobiles, consumer electronics, and machine tools, while other countries export chemicals, watches, and jewelry, David Ricardo's theory of comparative advantage offers an explanation in terms of
Your Answer: the interplay between the proportions in which the factors of production (such as land, labor, and capital) are available in different countries and the proportions in which they are needed for producing particular goods.
Correct Answer: international differences in labor productivity.
Feedback: Difficulty: Hard
Page: 145
Question 8 Multiple Choice 1 of 1 point(s)
Porter argues that the presence of all components is usually required for the “diamond” to boost:
Your Answer: competitive performance.
Correct Answer: competitive performance.
Feedback: Difficulty: Medium
Page: 168
Question 9 Multiple Choice 1 of 1 point(s)
__________ refers to a situation where a government does not attempt to influence through quotas or duties what its citizens can buy from another country or what they can produce and sell to another country.
Your Answer: Free trade
Correct Answer: Free trade
Feedback: Difficulty: Easy
Page: 144
Question 10 Multiple Choice 1 of 1 point(s)
Porter contends that the degree to which a nation is likely to achieve international success _______ is a function of the combined impact of factor endowments, domestic demand conditions, related and supporting industries, and domestic rivalry.
Your Answer: in a certain industry
Correct Answer: in a certain industry
Feedback: Difficulty: Medium
Page: 168
Question 1 Multiple Choice 0 of 1 point(s)
Economies of scale and learning effects both increase the efficiency of resource utilization, therefore increasing
Your Answer: factor endowments.
Correct Answer: productivity.
Feedback: Difficulty: Medium
Page: 164
Question 2 Multiple Choice 1 of 1 point(s)
_______, according to Michael Porter, are a nation's position in factors of production such as skilled labor or the infrastructure necessary to compete in a given industry.
Your Answer: Factor endowments
Correct Answer: Factor endowments
Feedback: Difficulty: Hard
Page: 165
Question 3 True/False 1 of 1 point(s)
In sum, Porter's argument is that the degree to which a nation is likely to achieve international success in a certain industry is a function of the combined impact of factor endowments, domestic demand conditions, related and supporting industries, and degree of government support.
Your Answer: false
Correct Answer: false
Feedback: Difficulty: Medium
Page: 168
Question 4 Multiple Choice 0 of 1 point(s)
Unlike the naturally endowed basic factors, advanced factors are a product of investment by all of the following except
Your Answer: governments.
Correct Answer: demographics.
Feedback: Difficulty: Easy
Page: 166
Question 5 Multiple Choice 1 of 1 point(s)
The __________ argues that in many industries, because of substantial economies of scale, there are increasing returns to specialization.
Your Answer: new trade theory
Correct Answer: new trade theory
Feedback: Difficulty: Medium
Page: 162
Question 6 True/False 0 of 1 point(s)
Free trade is a situation where a government does not attempt to influence through quotas or duties what its citizens can buy from another country or what they can produce and sell to another country.
Your Answer: false
Correct Answer: true
Feedback: Difficulty: Easy
Page: 144
Question 7 Multiple Choice 1 of 1 point(s)
In his study, Porter observed that there are a disproportionate number of people with finance backgrounds on the top management teams of many __________ industries.
Your Answer: United States
Correct Answer: United States
Feedback: Difficulty: Hard
Page: 167
Question 8 Multiple Choice 1 of 1 point(s)
Propagated in the 16th and 17th centuries, __________ advocated that countries should simultaneously encourage exports and discourage imports.
Your Answer: mercantilism
Correct Answer: mercantilism
Feedback: Difficulty: Easy
Page: 144
Question 9 Multiple Choice 0 of 1 point(s)
Porter's thesis was that four broad attributes of a nation shape the environment in which local firms compete, and that these attributes promote or impede the creation of competitive advantage. All of the following are attributes except:
Your Answer: factor endowments
Correct Answer: customs
Feedback: Difficulty: Hard
Page: 165-166
Question 10 Multiple Choice 1 of 1 point(s)
In terms of explaining why some countries export automobiles, consumer electronics, and machine tools, while other countries export chemicals, watches, and jewelry, David Ricardo's theory of comparative advantage offers an explanation in terms of
Your Answer: international differences in labor productivity.
Correct Answer: international differences in labor productivity.
Feedback: Difficulty: Hard
Page: 145
Question 1 Multiple Choice 1 of 1 point(s)
The Heckscher-Ohlin theory has a(n) _______ appeal.
Your Answer: commonsense
Correct Answer: commonsense
Feedback: Difficulty: Medium
Page: 158
Question 2 True/False 1 of 1 point(s)
Economic growth is positively effected by free trade.
Your Answer: true
Correct Answer: true
Feedback: Difficulty: Medium
Page: 157
Question 3 Multiple Choice 1 of 1 point(s)
The Hecksher-Olin theory argues that the pattern of international trade is determined by differences in:
Your Answer: factor endowments
Correct Answer: factor endowments
Feedback: Difficulty: Medium
Page: 158
Question 4 Multiple Choice 1 of 1 point(s)
Porter visually depicted the four broad attributes that shape the competitive advantage of a nation as a:
Your Answer: diamond
Correct Answer: diamond
Feedback: Difficulty: Medium
Page: 165
Question 5 True/False 1 of 1 point(s)
Because it makes fewer simplifying assumptions, and it has been subjected to many empirical tests, most economists prefer the Heckscher-Ohlin theory to Ricardo's theory.
Your Answer: true
Correct Answer: true
Feedback: Difficulty: Medium
Page: 158
Question 6 Multiple Choice 1 of 1 point(s)
Porter contends that the degree to which a nation is likely to achieve international success _______ is a function of the combined impact of factor endowments, domestic demand conditions, related and supporting industries, and domestic rivalry.
Your Answer: in a certain industry
Correct Answer: in a certain industry
Feedback: Difficulty: Medium
Page: 168
Question 7 Multiple Choice 0 of 1 point(s)
_______ theory of international trade suggests that the production of products is likely to switch from advanced countries to developing countries over time.
Your Answer: New trade
Correct Answer: Product life-cycle
Feedback: Difficulty: Medium
Page: 160
Question 8 Multiple Choice 0 of 1 point(s)
Because of substantial economies of scale, the __________ theory argues that in many industries there are increasing returns to specialization.
Your Answer: product life-cycle
Correct Answer: new trade
Feedback: Difficulty: Medium
Page: 162
Question 9 Multiple Choice 0 of 1 point(s)
Which of the following international management scholars argued that the "invisible hand" of the market mechanism, rather than government policy, should determine what a country imports and what it exports?
Your Answer: David Ricardo
Correct Answer: Adam Smith
Feedback: Difficulty: Hard
Page: 144
Question 10 Multiple Choice 1 of 1 point(s)
_______ is not consistent with the central beliefs of mercantilism.
Your Answer: Policies should be put in place to minimize exports and maximize imports
Correct Answer: Policies should be put in place to minimize exports and maximize imports
Feedback: Difficulty: Hard
Page: 148
Question 1 True/False 1 of 1 point(s)
In his 1776 landmark book, The Wealth of Nations, Adam Smith supported the mercantilist assumption that trade is a zero-sum game.
Your Answer: false
Correct Answer: false
Feedback: Difficulty: Medium
Page: 148
Question 2 True/False 0 of 1 point(s)
According to Porter, the four broad attributes of a nation that shape the environment in which local firms compete and that promote or impede the creation of competitive advantage are demand conditions, firm strategy, structure, and rivalry, factor endowments, and relating and supporting industries.
Your Answer: false
Correct Answer: true
Feedback: Difficulty: Medium
Page: 165
Question 3 Multiple Choice 0 of 1 point(s)
New trade theorists stress the role of which of the following three variables in giving a firm first-mover advantage?
Your Answer: Entrepreneurship, favorable foreign exchange rates, and innovation
Correct Answer: Luck, entrepreneurship, and innovation
Feedback: Difficulty: Hard
Page: 164
Question 4 Multiple Choice 1 of 1 point(s)
Propagated in the 16th and 17th centuries, __________ advocated that countries should simultaneously encourage exports and discourage imports.
Your Answer: mercantilism
Correct Answer: mercantilism
Feedback: Difficulty: Easy
Page: 144
Question 5 Multiple Choice 1 of 1 point(s)
The Heckscher-Ohlin theory has a(n) _______ appeal.
Your Answer: commonsense
Correct Answer: commonsense
Feedback: Difficulty: Medium
Page: 158
Question 6 Multiple Choice 0 of 1 point(s)
Governments often ease the transition toward free trade by _______ those who lose their jobs as a result.
Your Answer: creating new jobs for
Correct Answer: helping to retrain
Feedback: Difficulty: Medium
Page: 154
Question 7 Multiple Choice 0 of 1 point(s)
_______ returns to specialization occur when the resources required to produce a good are assumed to remain constant no matter where it is on a country's production possibility frontier.
Your Answer: Diminishing
Correct Answer: Constant
Feedback: Difficulty: Medium
Page: 154
Question 8 Multiple Choice 1 of 1 point(s)
The theory of comparative advantage
Your Answer: provides a strong rationale for encouraging free trade.
Correct Answer: provides a strong rationale for encouraging free trade.
Feedback: Difficulty: Medium
Page: 153
Question 9 Multiple Choice 1 of 1 point(s)
Which of the following correctly matches one of Porter's broad attributes with its definition?
Your Answer: Firm strategy, structure, and rivalry - the conditions governing how companies are created, organized, and managed and the nature of domestic rivalry
Correct Answer: Firm strategy, structure, and rivalry - the conditions governing how companies are created, organized, and managed and the nature of domestic rivalry
Feedback: Difficulty: Medium
Page: 166
Question 10 Multiple Choice 1 of 1 point(s)
Porter's thesis was that four broad attributes of a nation shape the environment in which local firms compete, and that these attributes promote or impede the creation of competitive advantage. All of the following are attributes except:
Your Answer: customs
Correct Answer: customs
Feedback: Difficulty: Hard
Page: 165-166
Question 1 Multiple Choice 1 of 1 point(s)
Which of these occurs if an economy is opened to trade?
Your Answer: Free trade might increase the efficiency with which a country uses its resources.
Correct Answer: Free trade might increase the efficiency with which a country uses its resources.
Feedback: Difficulty: Medium
Page: 156
Question 2 Multiple Choice 0 of 1 point(s)
To an even greater degree than the theory of absolute advantage, the theory of __________ suggests that trade is a positive-sum game in which all gain.
Your Answer: total advantage
Correct Answer: comparative advantage
Feedback: Difficulty: Medium
Page: 153
Question 3 Multiple Choice 0 of 1 point(s)
In terms of explaining why some countries export automobiles, consumer electronics, and machine tools, while other countries export chemicals, watches, and jewelry, David Ricardo's theory of comparative advantage offers an explanation in terms of
Your Answer: the interplay between the proportions in which the factors of production (such as land, labor, and capital) are available in different countries and the proportions in which they are needed for producing particular goods.
Correct Answer: international differences in labor productivity.
Feedback: Difficulty: Hard
Page: 145
Question 4 True/False 1 of 1 point(s)
Because it makes fewer simplifying assumptions, and it has been subjected to many empirical tests, most economists prefer the Heckscher-Ohlin theory to Ricardo's theory.
Your Answer: true
Correct Answer: true
Feedback: Difficulty: Medium
Page: 158
Question 5 Multiple Choice 1 of 1 point(s)
Dynamic gains in both the stock of a country's resources and the efficiency with which resources are utilized will cause a country's PPF to:
Your Answer: shift outward
Correct Answer: shift outward
Feedback: Difficulty: Hard
Page: 156
Question 6 Multiple Choice 0 of 1 point(s)
The theory of __________ was advanced by Adam Smith.
Your Answer: similar opportunity
Correct Answer: absolute advantage
Feedback: Difficulty: Easy
Page: 144
Question 7 Multiple Choice 0 of 1 point(s)
Hagelstam observed that in most trade negotiations, the approach of individual negotiating countries has been to press for trade _______ in areas where their own comparative competitive advantages are the strongest, and to resist _______ in areas where they are less competitive and fear that imports would replace domestic production.
Your Answer: capitalization; socialization
Correct Answer: liberalization; liberalization
Feedback: Difficulty: Medium
Page: 148
Question 8 True/False 0 of 1 point(s)
The new trade theorists argue that in those industries where the existence of substantial economies of scale imply that the world market will profitably support only a few firms, countries may export certain products simply because they have a firm that was an early entrant into that industry.
Your Answer: false
Correct Answer: true
Feedback: Difficulty: Medium
Page: 162
Question 9 Multiple Choice 1 of 1 point(s)
Which of the following choices correctly matches a scholar with the theory that he or she proposed?
Your Answer: Raymond Vernon / Product Life Cycle
Correct Answer: Raymond Vernon / Product Life Cycle
Feedback: Difficulty: Medium
Page: 145 & 147
Question 10 Multiple Choice 0 of 1 point(s)
Which of the following correctly matches one of Porter's broad attributes with its definition?
Your Answer: Factor endowments - the presence or absence of supplier industries and related industries that are internationally competitive
Correct Answer: Firm strategy, structure, and rivalry - the conditions governing how companies are created, organized, and managed and the nature of domestic rivalry
Question 1 Multiple Choice 0 of 1 point(s)
The flaw with mercantilism was that it viewed trade as a(n) __________.
Your Answer: [None Given]
Correct Answer: zero-sum game
Feedback: Difficulty: Medium
Page: 148
Question 2 True/False 0 of 1 point(s)
A firm should invest in upgrading advanced factors of production because it is in the best interest of business for a firm, according to Porter's theory.
Your Answer: [None Given]
Correct Answer: true
Feedback: Difficulty: Medium
Page: 171
Question 3 Multiple Choice 0 of 1 point(s)
_______ is the basic message of the theory of comparative advantage.
Your Answer: [None Given]
Correct Answer: Potential world production is greater with unrestricted free trade than it is with restricted trade
Feedback: Difficulty: Hard
Page: 153
Question 4 True/False 0 of 1 point(s)
The great strength of the theories of Smith, Ricardo, and Heckscher-Ohlin is that they identify the specific benefits of international trade.
Your Answer: [None Given]
Correct Answer: true
Feedback: Difficulty: Medium
Page: 144
Question 5 Multiple Choice 0 of 1 point(s)
According to David Hume, if England had a balance-of-trade surplus with France, the resulting inflow of gold and silver would:
Your Answer: [None Given]
Correct Answer: increase the money supply and cause inflation in England
Feedback: Difficulty: Medium
Page: 148
Question 6 Multiple Choice 0 of 1 point(s)
A situation in which a gain by one party results in a loss by another is called a(n) _______.
Your Answer: [None Given]
Correct Answer: zero-sum game
Feedback: Difficulty: Easy
Page: 148
Question 7 Multiple Choice 0 of 1 point(s)
Which theory predicts that countries will export those goods that make intensive use of those factors that are locally abundant, while importing goods that make intensive use of factors that are locally scarce?
Your Answer: [None Given]
Correct Answer: Hecksher-Olin
Feedback: Difficulty: Medium
Page: 158
Question 8 Multiple Choice 0 of 1 point(s)
In the 20th century, __________ work was refined by two Swedish economists, Eli Heckscher and Bertil Ohlin, whose theory is known as the Heckscher-Ohlin theory.
Your Answer: [None Given]
Correct Answer: Ricardo's
Feedback: Difficulty: Medium
Page: 144
Question 9 Multiple Choice 0 of 1 point(s)
Dynamic gains in both the stock of a country's resources and the efficiency with which resources are utilized will cause a country's PPF to:
Your Answer: [None Given]
Correct Answer: shift outward
Feedback: Difficulty: Hard
Page: 156
Question 10 Multiple Choice 0 of 1 point(s)
Vernon's product life-cycle theory was based on the observation that for most of the 20th century a very large proportion of the world's new products had been developed by U.S. firms and sold first in the _______ market.
Your Answer: [None Given]
Correct Answer: U.S.
Feedback: Difficulty: Medium
Page: 159
Question 1 Multiple Choice 1 of 1 point(s)
Economies of scale and learning effects both increase the efficiency of resource utilization, therefore increasing
Your Answer: productivity.
Correct Answer: productivity.
Feedback: Difficulty: Medium
Page: 164
Question 2 True/False 1 of 1 point(s)
Free trade is a situation where a government does not attempt to influence through quotas or duties what its citizens can buy from another country or what they can produce and sell to another country.
Your Answer: true
Correct Answer: true
Feedback: Difficulty: Easy
Page: 144
Question 3 Multiple Choice 1 of 1 point(s)
According to the new trade theory, if international trade results in a country specializing in the production of a certain good, and if there are economies of scale in producing that good, then as output of that good expands, unit costs will:
Your Answer: fall
Correct Answer: fall
Feedback: Difficulty: Medium
Page: 162
Question 4 True/False 1 of 1 point(s)
Smith's basic argument was that a country should never produce goods at home that it can buy at a lower cost from other countries.
Your Answer: true
Correct Answer: true
Feedback: Difficulty: Medium
Page: 148
Question 5 Multiple Choice 1 of 1 point(s)
_______ returns to specialization occur when the resources required to produce a good are assumed to remain constant no matter where it is on a country's production possibility frontier.
Your Answer: Constant
Correct Answer: Constant
Feedback: Difficulty: Medium
Page: 154
Question 6 Multiple Choice 1 of 1 point(s)
The flaw with mercantilism was that it viewed trade as a(n) __________.
Your Answer: zero-sum game
Correct Answer: zero-sum game
Feedback: Difficulty: Medium
Page: 148
Question 7 True/False 0 of 1 point(s)
The first theory of international trade emerged in England in the mid-16th century. Referred to as the theory of comparative advantage, its principle assertion was that gold and silver were the mainstays of national wealth and essential to vigorous commerce.
Your Answer: true
Correct Answer: false
Feedback: Difficulty: Medium
Page: 147
Question 8 Multiple Choice 1 of 1 point(s)
Hagelstam observed that in most trade negotiations, the approach of individual negotiating countries has been to press for trade _______ in areas where their own comparative competitive advantages are the strongest, and to resist _______ in areas where they are less competitive and fear that imports would replace domestic production.
Your Answer: liberalization; liberalization
Correct Answer: liberalization; liberalization
Feedback: Difficulty: Medium
Page: 148
Question 9 Multiple Choice 1 of 1 point(s)
_______, according to Michael Porter, are a nation's position in factors of production such as skilled labor or the infrastructure necessary to compete in a given industry.
Your Answer: Factor endowments
Correct Answer: Factor endowments
Feedback: Difficulty: Hard
Page: 165
Question 10 Multiple Choice 1 of 1 point(s)
Porter's thesis was that four broad attributes of a nation shape the environment in which local firms compete, and that these attributes promote or impede the creation of competitive advantage. All of the following are attributes except:
Your Answer: customs
Correct Answer: customs
Feedback: Difficulty: Hard
Page: 165-166
Question 1 True/False 1 of 1 point(s)
Economic growth is positively effected by free trade.
Your Answer: true
Correct Answer: true
Feedback: Difficulty: Medium
Page: 157
Question 2 True/False 1 of 1 point(s)
Smith's basic argument was that a country should never produce goods at home that it can buy at a lower cost from other countries.
Your Answer: true
Correct Answer: true
Feedback: Difficulty: Medium
Page: 148
Question 3 Multiple Choice 1 of 1 point(s)
The __________ argues that in many industries, because of substantial economies of scale, there are increasing returns to specialization.
Your Answer: new trade theory
Correct Answer: new trade theory
Feedback: Difficulty: Medium
Page: 162
Question 4 Multiple Choice 1 of 1 point(s)
Cost savings that come from learning by doing is referred to as:
Your Answer: learning effects.
Correct Answer: learning effects.
Feedback: Difficulty: Easy
Page: 163
Question 5 Multiple Choice 0 of 1 point(s)
The theory of __________, developed by Michael Porter, focuses on the importance of country factors such as domestic demand and domestic rivalry in explaining a nation's dominance in the production and export of particular products.
Your Answer: new trade
Correct Answer: national competitive advantage
Feedback: Difficulty: Medium
Page: 147
Question 6 Multiple Choice 1 of 1 point(s)
Unlike the naturally endowed basic factors, advanced factors are a product of investment by all of the following except
Your Answer: demographics.
Correct Answer: demographics.
Feedback: Difficulty: Easy
Page: 166
Question 7 Multiple Choice 0 of 1 point(s)
Because of substantial economies of scale, the __________ theory argues that in many industries there are increasing returns to specialization.
Your Answer: product life-cycle
Correct Answer: new trade
Feedback: Difficulty: Medium
Page: 162
Question 8 Multiple Choice 1 of 1 point(s)
_______ is a situation in which one country is more efficient at producing a product than any other country.
Your Answer: Absolute advantage
Correct Answer: Absolute advantage
Feedback: Difficulty: Medium
Page: 148
Question 9 Multiple Choice 1 of 1 point(s)
In the 20th century, __________ work was refined by two Swedish economists, Eli Heckscher and Bertil Ohlin, whose theory is known as the Heckscher-Ohlin theory.
Your Answer: Ricardo's
Correct Answer: Ricardo's
Feedback: Difficulty: Medium
Page: 144
Question 10 Multiple Choice 1 of 1 point(s)
In 1990, Michael Porter published the results of an intensive research effort that attempted to determine why some nations succeed and others fail in international competition. The name of the book was:
Your Answer: The Competitive Advantage of Nations
Correct Answer: The Competitive Advantage of Nations
Feedback: Difficulty: Medium
Page: 165
Question 1 Multiple Choice 1 of 1 point(s)
_______ returns to specialization occur when the resources required to produce a good are assumed to remain constant no matter where it is on a country's production possibility frontier.
Your Answer: Constant
Correct Answer: Constant
Feedback: Difficulty: Medium
Page: 154
Question 2 Multiple Choice 1 of 1 point(s)
Cost savings that come from learning by doing is referred to as:
Your Answer: learning effects.
Correct Answer: learning effects.
Feedback: Difficulty: Easy
Page: 163
Question 3 Multiple Choice 0 of 1 point(s)
Which of these occurs if an economy is opened to trade?
Your Answer: Economies of small-scale production would not be available as trade expands the size of the total market available to domestic firms.
Correct Answer: Free trade might increase the efficiency with which a country uses its resources.
Feedback: Difficulty: Medium
Page: 156
Question 4 Multiple Choice 0 of 1 point(s)
In his 1817 book entitled Principles of Political Economy, _______ introduced the theory of comparative advantage.
Your Answer: Adam Smith
Correct Answer: David Ricardo
Feedback: Difficulty: Medium
Page: 151
Question 5 Multiple Choice 1 of 1 point(s)
Resources do not always move easily from one economic activity to another and the process creates:
Your Answer: friction and human suffering.
Correct Answer: friction and human suffering.
Feedback: Difficulty: Medium
Page: 154
Question 6 Multiple Choice 1 of 1 point(s)
Porter visually depicted the four broad attributes that shape the competitive advantage of a nation as a:
Your Answer: diamond
Correct Answer: diamond
Feedback: Difficulty: Medium
Page: 165
Question 7 True/False 0 of 1 point(s)
The first theory of international trade emerged in England in the mid-16th century. Referred to as the theory of comparative advantage, its principle assertion was that gold and silver were the mainstays of national wealth and essential to vigorous commerce.
Your Answer: true
Correct Answer: false
Feedback: Difficulty: Medium
Page: 147
Question 8 Multiple Choice 1 of 1 point(s)
Which of the following correctly matches one of Porter's broad attributes with its definition?
Your Answer: Firm strategy, structure, and rivalry - the conditions governing how companies are created, organized, and managed and the nature of domestic rivalry
Correct Answer: Firm strategy, structure, and rivalry - the conditions governing how companies are created, organized, and managed and the nature of domestic rivalry
Feedback: Difficulty: Medium
Page: 166
Question 9 Multiple Choice 1 of 1 point(s)
A situation in which a gain by one party results in a loss by another is called a(n) _______.
Your Answer: zero-sum game
Correct Answer: zero-sum game
Feedback: Difficulty: Easy
Page: 148
Question 10 Multiple Choice 1 of 1 point(s)
Porter contends that the degree to which a nation is likely to achieve international success _______ is a function of the combined impact of factor endowments, domestic demand conditions, related and supporting industries, and domestic rivalry.
Your Answer: in a certain industry
Correct Answer: in a certain industry
Feedback: Difficulty: Medium
Page: 168
Question 1 Multiple Choice 1 of 1 point(s)
Dynamic gains in both the stock of a country's resources and the efficiency with which resources are utilized will cause a country's PPF to:
Your Answer: shift outward
Correct Answer: shift outward
Feedback: Difficulty: Hard
Page: 156
Question 2 True/False 1 of 1 point(s)
Free trade is a situation where a government does not attempt to influence through quotas or duties what its citizens can buy from another country or what they can produce and sell to another country.
Your Answer: true
Correct Answer: true
Feedback: Difficulty: Easy
Page: 144
Question 3 True/False 0 of 1 point(s)
When a movement toward a free trade regime occurs, the pain is a long-term phenomenon, while the gains from trade once the transition has been made, and are both insignificant and short-term.
Your Answer: true
Correct Answer: false
Feedback: Difficulty: Medium
Page: 154
Question 4 Multiple Choice 1 of 1 point(s)
_______, according to Michael Porter, are a nation's position in factors of production such as skilled labor or the infrastructure necessary to compete in a given industry.
Your Answer: Factor endowments
Correct Answer: Factor endowments
Feedback: Difficulty: Hard
Page: 165
Question 5 Multiple Choice 1 of 1 point(s)
According to David Hume, if England had a balance-of-trade surplus with France, the resulting inflow of gold and silver would:
Your Answer: increase the money supply and cause inflation in England
Correct Answer: increase the money supply and cause inflation in England
Feedback: Difficulty: Medium
Page: 148
Question 6 Multiple Choice 1 of 1 point(s)
The Hecksher-Olin theory argues that the pattern of international trade is determined by differences in:
Your Answer: factor endowments
Correct Answer: factor endowments
Feedback: Difficulty: Medium
Page: 158
Question 7 True/False 1 of 1 point(s)
Adam Smith argued that the invisible hand of the market mechanism, rather than government policy, should determine what a country imports and what it exports.
Your Answer: true
Correct Answer: true
Feedback: Difficulty: Easy
Page: 144
Question 8 Multiple Choice 1 of 1 point(s)
Swedish economists, __________ and __________, advanced a theory of trade that argued that comparative advantage arises from differences in national factor endowments.
Your Answer: Hecksher, Ohlin
Correct Answer: Hecksher, Ohlin
Feedback: Difficulty: Medium
Page: 158
Question 9 Multiple Choice 1 of 1 point(s)
__________ refers to a situation where a government does not attempt to influence through quotas or duties what its citizens can buy from another country or what they can produce and sell to another country.
Your Answer: Free trade
Correct Answer: Free trade
Feedback: Difficulty: Easy
Page: 144
Question 10 Multiple Choice 1 of 1 point(s)
Which of the following international trade scholars was the first to explain why unrestricted free trade is beneficial to a country?
Your Answer: Adam Smith
Correct Answer: Adam Smith
Feedback: Difficulty: Medium
Page: 144
Question 1 Multiple Choice 1 of 1 point(s)
Porter's thesis was that four broad attributes of a nation shape the environment in which local firms compete, and that these attributes promote or impede the creation of competitive advantage. All of the following are attributes except:
Your Answer: customs
Correct Answer: customs
Feedback: Difficulty: Hard
Page: 165-166
Question 2 Multiple Choice 1 of 1 point(s)
In his study, Porter observed that there are a disproportionate number of people with finance backgrounds on the top management teams of many __________ industries.
Your Answer: United States
Correct Answer: United States
Feedback: Difficulty: Hard
Page: 167
Question 3 Multiple Choice 0 of 1 point(s)
Contrary to what the Heckscher-Ohlin theory would predict, the United States has been a primary importer rather than an exporter of capital goods. This phenomenon is referred to as the _____ paradox.
Your Answer: Ricardo
Correct Answer: Leontief
Feedback: Difficulty: Easy
Page: 158
Question 4 Multiple Choice 1 of 1 point(s)
_______, by its choice of policies, can detract from or improve national advantage.
Your Answer: Government
Correct Answer: Government
Feedback: Difficulty: Easy
Page: 166
Question 5 Multiple Choice 1 of 1 point(s)
Which theory predicts that countries will export those goods that make intensive use of those factors that are locally abundant, while importing goods that make intensive use of factors that are locally scarce?
Your Answer: Hecksher-Olin
Correct Answer: Hecksher-Olin
Feedback: Difficulty: Medium
Page: 158
Question 6 True/False 1 of 1 point(s)
The first theory of international trade emerged in England in the mid-16th century. Referred to as the theory of comparative advantage, its principle assertion was that gold and silver were the mainstays of national wealth and essential to vigorous commerce.
Your Answer: false
Correct Answer: false
Feedback: Difficulty: Medium
Page: 147
Question 7 Multiple Choice 1 of 1 point(s)
The conditions governing how companies are created, organized, and managed and the nature of domestic rivalry is referred to as
Your Answer: firm strategy, structure, and rivalry.
Correct Answer: firm strategy, structure, and rivalry.
Feedback: Difficulty: Easy
Page: 166
Question 8 Multiple Choice 1 of 1 point(s)
_______ theory of international trade suggests that the production of products is likely to switch from advanced countries to developing countries over time.
Your Answer: Product life-cycle
Correct Answer: Product life-cycle
Feedback: Difficulty: Medium
Page: 160
Question 9 True/False 1 of 1 point(s)
According to Porter, the four broad attributes of a nation that shape the environment in which local firms compete and that promote or impede the creation of competitive advantage are demand conditions, firm strategy, structure, and rivalry, factor endowments, and relating and supporting industries.
Your Answer: true
Correct Answer: true
Feedback: Difficulty: Medium
Page: 165
Question 10 Multiple Choice 1 of 1 point(s)
The flaw with mercantilism was that it viewed trade as a(n) __________.
Your Answer: zero-sum game
Correct Answer: zero-sum game
Feedback: Difficulty: Medium
Page: 148
Question 1 Multiple Choice 1 of 1 point(s)
Unlike the naturally endowed basic factors, advanced factors are a product of investment by all of the following except
Your Answer: demographics.
Correct Answer: demographics.
Feedback: Difficulty: Easy
Page: 166
Question 2 Multiple Choice 0 of 1 point(s)
According to the new trade theorists, because early entrants are able to gain __________, the early entrants into an industry may get a lock on the world market that discourages subsequent entry.
Your Answer: high brand awareness
Correct Answer: economies of scale
Feedback: Difficulty: Medium
Page: 164
Question 3 True/False 1 of 1 point(s)
Smith's basic argument was that a country should never produce goods at home that it can buy at a lower cost from other countries.
Your Answer: true
Correct Answer: true
Feedback: Difficulty: Medium
Page: 148
Question 4 True/False 1 of 1 point(s)
The first theory of international trade emerged in England in the mid-16th century. Referred to as the theory of comparative advantage, its principle assertion was that gold and silver were the mainstays of national wealth and essential to vigorous commerce.
Your Answer: false
Correct Answer: false
Feedback: Difficulty: Medium
Page: 147
Question 5 Multiple Choice 1 of 1 point(s)
Which theory of international trade directly explains why there are only two to three producers of airlines in the world today?
Your Answer: New trade
Correct Answer: New trade
Feedback: Difficulty: Medium
Page: 163
Question 6 Multiple Choice 1 of 1 point(s)
The conditions governing how companies are created, organized, and managed and the nature of domestic rivalry is referred to as
Your Answer: firm strategy, structure, and rivalry.
Correct Answer: firm strategy, structure, and rivalry.
Feedback: Difficulty: Easy
Page: 166
Question 7 Multiple Choice 1 of 1 point(s)
Economies of scale and learning effects both increase the efficiency of resource utilization, therefore increasing
Your Answer: productivity.
Correct Answer: productivity.
Feedback: Difficulty: Medium
Page: 164
Question 8 True/False 0 of 1 point(s)
The product life-cycle theory stresses that in some cases, countries specialize in the production and export of particular products not because of underlying differences in factor endowments but because in certain industries the world market can support only a limited number of firms.
Your Answer: true
Correct Answer: false
Feedback: Difficulty: Medium
Page: 145 & 147
Question 9 Multiple Choice 1 of 1 point(s)
Porter contends that the degree to which a nation is likely to achieve international success _______ is a function of the combined impact of factor endowments, domestic demand conditions, related and supporting industries, and domestic rivalry.
Your Answer: in a certain industry
Correct Answer: in a certain industry
Feedback: Difficulty: Medium
Page: 168
Question 10 True/False 1 of 1 point(s)
Ricardo's theory of competitive advantage says that it is logical for a country to specialize in the product of goods that it produces most efficiently and to export goods that it produces less efficiently.
Your Answer: false
Correct Answer: false
Feedback: Difficulty: Medium
Page: 151
Question 1 True/False 1 of 1 point(s)
Free trade is a situation where a government does not attempt to influence through quotas or duties what its citizens can buy from another country or what they can produce and sell to another country.
Your Answer: true
Correct Answer: true
Feedback: Difficulty: Easy
Page: 144
Question 2 Multiple Choice 1 of 1 point(s)
In his study, Porter observed that there are a disproportionate number of people with finance backgrounds on the top management teams of many __________ industries.
Your Answer: United States
Correct Answer: United States
Feedback: Difficulty: Hard
Page: 167
Question 3 Multiple Choice 1 of 1 point(s)
Resources do not always move easily from one economic activity to another and the process creates:
Your Answer: friction and human suffering.
Correct Answer: friction and human suffering.
Feedback: Difficulty: Medium
Page: 154
Question 4 Multiple Choice 1 of 1 point(s)
The Heckscher-Ohlin theory ________ in explaining why some countries export oil while others export textiles.
Your Answer: emphasizes the interplay between the proportions in which the factors of production (such as land, labor, and capital) are available in different countries
Correct Answer: emphasizes the interplay between the proportions in which the factors of production (such as land, labor, and capital) are available in different countries
Feedback: Difficulty: Hard
Page: 145
Question 5 Multiple Choice 1 of 1 point(s)
Contrary to what the Heckscher-Ohlin theory would predict, the United States has been a primary importer rather than an exporter of capital goods. This phenomenon is referred to as the _____ paradox.
Your Answer: Leontief
Correct Answer: Leontief
Feedback: Difficulty: Easy
Page: 158
Question 6 Multiple Choice 1 of 1 point(s)
The theory of __________, developed by Michael Porter, focuses on the importance of country factors such as domestic demand and domestic rivalry in explaining a nation's dominance in the production and export of particular products.
Your Answer: national competitive advantage
Correct Answer: national competitive advantage
Feedback: Difficulty: Medium
Page: 147
Question 7 True/False 1 of 1 point(s)
Adam Smith argued that the invisible hand of the market mechanism, rather than government policy, should determine what a country imports and what it exports.
Your Answer: true
Correct Answer: true
Feedback: Difficulty: Easy
Page: 144
Question 8 Multiple Choice 0 of 1 point(s)
What theory attempts to explain why Japan is strong in automobiles, Switzerland in precision instruments and pharmaceuticals, and Germany in chemicals?
Your Answer: absolute advantage
Correct Answer: national competitive advantage
Feedback: Difficulty: Medium
Page: 165
Question 9 Multiple Choice 1 of 1 point(s)
Porter's thesis was that four broad attributes of a nation shape the environment in which local firms compete, and that these attributes promote or impede the creation of competitive advantage. All of the following are attributes except:
Your Answer: customs
Correct Answer: customs
Feedback: Difficulty: Hard
Page: 165-166
Question 10 Multiple Choice 1 of 1 point(s)
Because of substantial economies of scale, the __________ theory argues that in many industries there are increasing returns to specialization.
Your Answer: new trade
Correct Answer: new trade
Feedback: Difficulty: Medium
Page: 162
Question 1 Multiple Choice 1 of 1 point(s)
_______, according to Michael Porter, are a nation's position in factors of production such as skilled labor or the infrastructure necessary to compete in a given industry.
Your Answer: Factor endowments
Correct Answer: Factor endowments
Feedback: Difficulty: Hard
Page: 165
Question 2 Multiple Choice 0 of 1 point(s)
The __________ argues that in many industries, because of substantial economies of scale, there are increasing returns to specialization.
Your Answer: product life-cycle theory
Correct Answer: new trade theory
Feedback: Difficulty: Medium
Page: 162
Question 3 Multiple Choice 1 of 1 point(s)
In terms of explaining why some countries export automobiles, consumer electronics, and machine tools, while other countries export chemicals, watches, and jewelry, David Ricardo's theory of comparative advantage offers an explanation in terms of
Your Answer: international differences in labor productivity.
Correct Answer: international differences in labor productivity.
Feedback: Difficulty: Hard
Page: 145
Question 4 Multiple Choice 1 of 1 point(s)
Porter visually depicted the four broad attributes that shape the competitive advantage of a nation as a:
Your Answer: diamond
Correct Answer: diamond
Feedback: Difficulty: Medium
Page: 165
Question 5 True/False 1 of 1 point(s)
Adam Smith argued that the invisible hand of the market mechanism, rather than government policy, should determine what a country imports and what it exports.
Your Answer: true
Correct Answer: true
Feedback: Difficulty: Easy
Page: 144
Question 6 Multiple Choice 1 of 1 point(s)
What is a possible explanation for observing the Leontief paradox?
Your Answer: The U.S. has a special advantage in producing new products or goods made with innovative technologies.
Correct Answer: The U.S. has a special advantage in producing new products or goods made with innovative technologies.
Feedback: Difficulty: Medium
Page: 158
Question 7 True/False 1 of 1 point(s)
In sum, Porter's argument is that the degree to which a nation is likely to achieve international success in a certain industry is a function of the combined impact of factor endowments, domestic demand conditions, related and supporting industries, and degree of government support.
Your Answer: false
Correct Answer: false
Feedback: Difficulty: Medium
Page: 168
Question 8 Multiple Choice 1 of 1 point(s)
Resources do not always move easily from one economic activity to another and the process creates:
Your Answer: friction and human suffering.
Correct Answer: friction and human suffering.
Feedback: Difficulty: Medium
Page: 154
Question 9 Multiple Choice 1 of 1 point(s)
__________ refers to a situation where a government does not attempt to influence through quotas or duties what its citizens can buy from another country or what they can produce and sell to another country.
Your Answer: Free trade
Correct Answer: Free trade
Feedback: Difficulty: Easy
Page: 144
Question 10 Multiple Choice 1 of 1 point(s)
_______, by its choice of policies, can detract from or improve national advantage.
Your Answer: Government
Correct Answer: Government
Feedback: Difficulty: Easy
Page: 166
Question 1 True/False 1 of 1 point(s)
A situation in which a gain by one country results in a loss by another is a positive-sum game.
Your Answer: false
Correct Answer: false
Feedback: Difficulty: Easy
Page: 148
Question 2 Multiple Choice 1 of 1 point(s)
Hagelstam observed that in most trade negotiations, the approach of individual negotiating countries has been to press for trade _______ in areas where their own comparative competitive advantages are the strongest, and to resist _______ in areas where they are less competitive and fear that imports would replace domestic production.
Your Answer: liberalization; liberalization
Correct Answer: liberalization; liberalization
Feedback: Difficulty: Medium
Page: 148
Question 3 Multiple Choice 1 of 1 point(s)
What theory attempts to explain why Japan is strong in automobiles, Switzerland in precision instruments and pharmaceuticals, and Germany in chemicals?
Your Answer: national competitive advantage
Correct Answer: national competitive advantage
Feedback: Difficulty: Medium
Page: 165
Question 4 True/False 0 of 1 point(s)
The notion of first-mover advantages is associated with the product life cycle theory.
Your Answer: true
Correct Answer: false
Feedback: Difficulty: Medium
Page: 164
Question 5 True/False 1 of 1 point(s)
Raymond Vernon's theory of the Product Life-Cycle was based on the observation that for most of the 20th century a very large proportion of the world's new products were developed by U.S. firms and sold first in the U.S. market.
Your Answer: true
Correct Answer: true
Feedback: Difficulty: Medium
Page: 159
Question 6 Multiple Choice 1 of 1 point(s)
Vernon's product life-cycle theory was based on the observation that for most of the 20th century a very large proportion of the world's new products had been developed by U.S. firms and sold first in the _______ market.
Your Answer: U.S.
Correct Answer: U.S.
Feedback: Difficulty: Medium
Page: 159
Question 7 Multiple Choice 1 of 1 point(s)
Which theory stresses that in some cases countries specialize in the production and export of particular products not because of underlying differences in factor endowments but because in certain industries the world market can support only a limited number of firms?
Your Answer: New trade
Correct Answer: New trade
Feedback: Difficulty: Medium
Page: 147
Question 8 True/False 1 of 1 point(s)
Free trade is a situation where a government does not attempt to influence through quotas or duties what its citizens can buy from another country or what they can produce and sell to another country.
Your Answer: true
Correct Answer: true
Feedback: Difficulty: Easy
Page: 144
Question 9 Multiple Choice 1 of 1 point(s)
Porter contends that the degree to which a nation is likely to achieve international success _______ is a function of the combined impact of factor endowments, domestic demand conditions, related and supporting industries, and domestic rivalry.
Your Answer: in a certain industry
Correct Answer: in a certain industry
Feedback: Difficulty: Medium
Page: 168
Question 10 Multiple Choice 1 of 1 point(s)
The Hecksher-Olin theory argues that the pattern of international trade is determined by differences in:
Your Answer: factor endowments
Correct Answer: factor endowments
Feedback: Difficulty: Medium
Page: 158
Question 1 Multiple Choice 1 of 1 point(s)
In terms of explaining why some countries export automobiles, consumer electronics, and machine tools, while other countries export chemicals, watches, and jewelry, David Ricardo's theory of comparative advantage offers an explanation in terms of
Your Answer: international differences in labor productivity.
Correct Answer: international differences in labor productivity.
Feedback: Difficulty: Hard
Page: 145
Question 2 Multiple Choice 1 of 1 point(s)
The economic and strategic advantages that accrue to early entrants in an industry are called:
Your Answer: first-mover advantages
Correct Answer: first-mover advantages
Feedback: Difficulty: Easy
Page: 164
Question 3 Multiple Choice 1 of 1 point(s)
According to the new trade theorists, because early entrants are able to gain __________, the early entrants into an industry may get a lock on the world market that discourages subsequent entry.
Your Answer: economies of scale
Correct Answer: economies of scale
Feedback: Difficulty: Medium
Page: 164
Question 4 Multiple Choice 1 of 1 point(s)
Propagated in the 16th and 17th centuries, __________ advocated that countries should simultaneously encourage exports and discourage imports.
Your Answer: mercantilism
Correct Answer: mercantilism
Feedback: Difficulty: Easy
Page: 144
Question 5 Multiple Choice 0 of 1 point(s)
In his 1776 landmark book, The Wealth of Nations, __________ attacked the mercantilist assumption that trade is a zero-sum game.
Your Answer: Michael Porter
Correct Answer: Adam Smith
Feedback: Difficulty: Easy
Page: 148
Question 6 Multiple Choice 1 of 1 point(s)
_______ is/are unit cost reductions associated with a large scale of output.
Your Answer: Economies of scale
Correct Answer: Economies of scale
Feedback: Difficulty: Easy
Page: 162
Question 7 True/False 1 of 1 point(s)
Economic growth is positively effected by free trade.
Your Answer: true
Correct Answer: true
Feedback: Difficulty: Medium
Page: 157
Question 8 Multiple Choice 1 of 1 point(s)
_______ is a situation in which one country is more efficient at producing a product than any other country.
Your Answer: Absolute advantage
Correct Answer: Absolute advantage
Feedback: Difficulty: Medium
Page: 148
Question 9 True/False 1 of 1 point(s)
When a movement toward a free trade regime occurs, the pain is a long-term phenomenon, while the gains from trade once the transition has been made, and are both insignificant and short-term.
Your Answer: false
Correct Answer: false
Feedback: Difficulty: Medium
Page: 154
Question 10 Multiple Choice 0 of 1 point(s)
Which of the following choices correctly matches a scholar with the theory that he or she proposed?
Your Answer: David Ricardo / New Trade
Correct Answer: Raymond Vernon / Product Life Cycle
Feedback: Difficulty: Medium
Page: 145 & 147
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